Hello all, I recently got my letter from Mega stating that I owe them roughly $5k. A friend got his letter as well and he owes a whopping $15k.
My question is, how have the rest of you handled this? Were you able to negotiate a lower number or did they force you to pay all of the money?
Any and all help will be most appreciated!
Take a look at your last monthly statement. Assuming that most of the business you wrote is still on the books, your residuals should pay off most of that amount. If you are able to pay UGA the $5,000 then they will pay you your monthly residuals. If not they will Vector you for the amount owed. (Vector is the insurance companies’ equivalent of a credit bureau).
However, look on the bright side. All of your debt will be charged to your district manager.
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Make sure that brain is in gear before operating mouth
Try asking them to provide evidence of this debt balance.... from the time your first client paid their first premium to the time your last client dropped off and how they came up with this amount.....and did the commissions come from Mega Life.......and to provide you documentation of the checks cut from them to you.....cuz if they paid your GA and he paid you then he has to sue you.......
You'll have to pay. I was lucky enough to get out early but I know agents who have owed a significant amount and they will chase after you. I have a buddy in NC who owed $8,000 and UGA turned him over to collections - trashed his credit and his phone started ringing every day. They ended up filing for a judgement and he decided to pay.
Regardless of who comes after you the problem is agents don't understand the liability of getting paid on submit nor do they understand how the debt account works.
Although it might be a "wash" - meaning as the deals stay on the books it reduces your liability the agreement signed states that the debt needs to be paid within 30 days of the termination of contract.
Now, UGA has a formula they use to determine if your account is likely to clear on it's own. It's called "formula gain." If you're in formula gain they might not pester you. However, if you're in "formula loss" which means your account won't clear they'll demand the money.
------------------------------------ Health Insurance Agents: Training, Support, Discounts, E&O for $440 www.ihiaa.com
No.....I think you owe on that one......see if they will let you write a new case to pay off that case......and really ask for your accounting from NASE .....make sure you have the names of all the people you wrote and and if there is business on the books to pay that off.....if they fail to provide this and turn you over to a collection agency then you tell them that they were unable to back up your request and if the can not provide it to the collection agency will drop the request for collections......
Originally Posted by fostever
Sti, I owe Shenandoah $440 from my NAA experience. Does my Mananger have to sue me too?
Just don't take advances and you have no problems.
If you can't survive without advances then you have other issues and might want to decide if this career is right for you.
I can not tell you how much I discourage advances, and it is not to be a jerk it is to point out what people won't admit - IT IS NOT YOUR MONEY!!!
Depends on how you run your business. Mega has nasty liability with advances since they pay on submit. I'm with you there - NEVER get paid on submit.
Aside from that, when the deal is approved pay me. Pay me the same day if you can. I love advances - have been on them since '04 without a cent of liability. I love 3 cases last year.....3 entire cases. I just don't get charged back for anything.
I sign up almost exclusively business owners who already have a plan and I'm simply lowering their rate. That's 85% of my book of business. I also take my time with them - 2 weeks being the average amount of time it take them to pull the trigger.
Now - ask me if I'd rather have $3,000 next week so I can pay bills and earn interest on the savings or have the carrier earn interest and pay me monthly? Interest free loan? I'll take it.
Actually, where's the advance liability even if you suck? Say 25% of your business blows back, your writing $10,000 a week at 20%.
Ok, so you suck and make $2,000 in advances then $500 blows back. If my math is right you're keeping $1,500 a week. Where's the liability?
I get advanced on Assurant and GR. If Aetna and BX offered advances I'd sign up tomorrow. Also, the longer you're in this game you have renewal income. I have three years of renewals coming in now so there's my "base" safety net of pay.
I encourage everyone to take advances since that's the litmus test. If you have so much business blowing back on you that you incur a negative account there's you sign to leave the industry.
I can't see anyone struggling while using their hard-earned saved money, punching out business and waiting 6 months to start paying bills. Insanity.
100% agreed WITH a caveat. The only "perceived" liability about advances is if a GA/MGA, etc. with a larger work force is liable for commissions and they have unethical agents or ignorant by choice or laziness.
The argument between as-earned vs. advanced is comparable to the BTID debate, but doesn't take into account the time value of money and opportunity cost. Granted we're only talking about months and not years initially, but the argument is sound about using OPM.
Taking John's $10,000 AV per week estimated with a 20% commission leaves an agent with $2000 per week or $104,000 a year before taxes, savings, expenses, etc. One method could be:
20%-30% savings for taxes (individual tax bracket and state taxes impact this number) leaves you with $1400
30% for marketing leaves you with $980.
25% secured (12% of gross) in a separate "save investment account" for chargebacks leaves you with........
$735 left over for business and personal expenses, which can be broken down in more different categories.
After a few years the renewals will given you even more money to dump into marketing and work the same strategy allowing you to get into advanced applications.
I can see the comfort zone of having as-earned, but who in their right mind (if they weren't personally liable as a GA) would give up the chance to obtain an interest free loan with low risk.
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[COLOR=#000066]"Tell me and I will forget. Show me and I will remember. Involve me and I will understand." Confucius
100% agreed WITH a caveat. The only "perceived" liability about advances is if a GA/MGA, etc. with a larger work force is liable for commissions and they have unethical agents or ignorant by choice or laziness.
The argument between as-earned vs. advanced is comparable to the BTID debate, but doesn't take into account the time value of money and opportunity cost. Granted we're only talking about months and not years initially, but the argument is sound about using OPM.
Taking John's $10,000 AV per week estimated with a 20% commission leaves an agent with $2000 per week or $104,000 a year before taxes, savings, expenses, etc. One method could be:
20%-30% savings for taxes (individual tax bracket and state taxes impact this number) leaves you with $1400
30% for marketing leaves you with $980.
25% secured (12% of gross) in a separate "save investment account" for chargebacks leaves you with........
$735 left over for business and personal expenses, which can be broken down in more different categories.
After a few years the renewals will given you even more money to dump into marketing and work the same strategy allowing you to get into advanced applications.
I can see the comfort zone of having as-earned, but who in their right mind (if they weren't personally liable as a GA) would give up the chance to obtain an interest free loan with low risk.
Interest free loan? With advance commissions through both World and GR I am being a charged 1% monthly interest rate. I do not consider myself to have a 20% comm rate from World and GR I consider it to be 19%.
Interest free loan? With advance commissions through both World and GR I am being a charged 1% monthly interest rate. I do not consider myself to have a 20% comm rate from World and GR I consider it to be 19%.
I am going as earned as soon as I can afford it!
It sounds like you're through AHCP or another organization. John P already illustrated the difference between direct and non-direct. Even so, where else can you find a 1% (monthly loan).
If I made $5000 in commission in one month and half of it charged back I'd be liable for $25 in interest. If somebody is worried about $25 or they have 50% of their business blow back they need to quickly reevaluate their ability to stay in this field.
First of all, the math quoted is wrong. If you're through an agency that advances indirect and they charge 1% it's on the balance, not the commission percentage.
Example:
$10,000 written X 20% = $2,000 X 1% charged = $20
Not
$10,000 written X 20% with 1% in commission charged means $10,000 X 19% = $1,900.
They are not taking 1% off your commission percentage. Also, outfits like AHCP do not charge 1% to advance commissions. There is no charge on advances. If you're at 20% you get the full 20%. They only charge 1% on debt. If you're in the hole, that's when the 1% kicks in.
The only company I know that charges to advance is Mega.
First of all, the math quoted is wrong. If you're through an agency that advances indirect and they charge 1% it's on the balance, not the commission percentage.
Example:
$10,000 written X 20% = $2,000 X 1% charged = $20
Not
$10,000 written X 20% with 1% in commission charged means $10,000 X 19% = $1,900.
They are not taking 1% off your commission percentage. Also, outfits like AHCP do not charge 1% to advance commissions. There is no charge on advances. If you're at 20% you get the full 20%. They only charge 1% on debt. If you're in the hole, that's when the 1% kicks in.
The only company I know that charges to advance is Mega.
Hmmmmm....Something sounds familiar????????
If I made $5000 in commission in one month and half of it charged back I'd be liable for $25 in interest.
WELL.....it seems that we have something that pertains to this thread...lets see how long this stays up....
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Hi Stibroker,
My name is xxxxxxxxx and I'm embarrassed to say, am an ex-agent with Mid-West/MEGA/Health Markets.
I wanted to see if you had any input for me from what you've experienced and heard on this forum and elsewhere.
My problem is this…actually, if you have a few minutes, allow me to share with you what I put on the Ripoff Report…I omitted certain things because I'm pondering a lawsuit for mis-leading, mis-representation, fraud, and other things by the managers on up at these companies…
Here's what I wrote out of pure frustration against Health Markets:
After over two years of working with Health Markets (Mid-West, MEGA, Cornerstone America), I finally let the burden and monkey off my back by focusing in another industry that isn't as sketchy as selling MEGA insurance nor as financially draining to the pocket book too. Sure the managers and regionals were nice to a certain degree and the training was consistent and in depth, but many things were mis-leading, mis-represented, and omitted to us agents...even to the degree where I've heard and read several agents say it was like 'brain washing' [they'd make you think the product is the best thing out there and teach you how to sell it without going over the flaws and pitfalls (somewhat deceiving people)...when in reality, the product is very limited and specific to who it can and can't help]. Not to mention that we agents were made to believe we'd all be making upwards to $90k our first year (assuming we could keep up with the unrealistic goals of 10+ appointments a week, etc.), supplied with great leads to call, and the business would build from there. It would take a little money to make money, but that's to be expected with any job, right? Come to find out, you're contracted with the company, yet treated like and employee and have certain expectations on you when it was apparent in training that we were free to be on our own.
No wonder the first office I worked out of went thru 50-100 agents each month...probably keeping 1% of them no more than a month or two at the longest!
And the leads...about as cold as it gets in Alaska for the most part, but still a lead (except for the 1/4 to 1/3 of them that either the phone numbers didn't work or people who said someone asked called them for their phone number and were almost 'forced' to give their info for something they didn't want or need).
So the main reason I'm writing this is due to this: I received a letter that now put a gorilla on my back...after selling for them, trying to keep a good face for the company and yet going into debt and losing money (since the company doesn't do a good job with servicing and answering questions due to the lack of needs the insurance actually meets); clients kept dropping the plans. So MEGA (Health Markets) is stating that because of the contract I signed, it's my responsibility to pay them back for advances I received that didn't even come close to paying the bills, and basically that it's my fault that Health Markets can't retain clients during and after I leave their company because the product flat out 'stinks' for the most part. Check out the article on NAIC...Health Markets is certainly 'reaping what they sow', but I don't want to pay their bills for them if I don't have to.
I know there are several out there that have faced the same situation so my question on our behalf is this:
Is there any way to get out from paying them this money that is supposedly owed to them since: 1.) I can't afford $xxxx, 2.) I don't feel it is just nor fair to pay them any money...they should pay me for trying to convince clients how good their insurance is, and 3. So I can just move on with my life and prohibit other agents from getting upside down in their finances and deal with the same misfortune and mess it appears I'm dealing with now."
Thanks Stibroker,
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CALL Me....512-260-0856
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Sorry "Stibroker",
I've been getting slammed with work which is good considering this economy!
I've been testing and seeing what this guy in Cornerstone's Collection Dept (AKA Health Markets, MEGA, Mid-West) wants and is willing to do, but he sure has little man syndrome.
We apparently owe them $xxxx + and he said he'd take $xxxx, but I still don't have that nor want to pay it.
He's asking for my tax assessment, and not sure I really want him to have that info as well as health items since we said I've been having health probs...which is true. I'm going to also ask an attorney friend if there's anything I can do, but I'll call you to see if you have any ideas from other's you've "threaded" with on the insurance forums.
Thanks and hope you're doing well,
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Ask him to provide a complete accounting of your account from your fist client to your last client and documentation of how long they were on the books and when they fell off ......
Good call. I used to be able to access that info, but can't now since I left the company.
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[COLOR=#0000ff]Exactly...I think that's what they hope...just sent that email to the guy...his name is "xxxx" of all names. =)[/COLOR]
[COLOR=#0000ff]I'm not as pissed as I was, but still am willing to fight for what's right.[/COLOR]
[COLOR=#0000ff]If I owe them, then I owe them, but I do not trust them!
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Can you or someone provide me with a complete accounting of my account from
The fist client to my last client and documentation of how long they were on
The books and when they fell off please?
Thanks xxxx,
Xxxxxxxxx
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[COLOR=#000000]I can provide you everything with the exception on when a policy, or who, dropped off the books. It is against HIPAA regulations to even view this material. I always tell everyone though that in order to figure out who has dropped off, just do a simple process of elimination, i.e., if John Doe is on the books in March and April then no longer in May, he has dropped off.
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[COLOR=#0000ff]Hi xxxx,[/COLOR]
[COLOR=#0000ff]I have a records of the applications I sold, so i[/COLOR][COLOR=#0000ff]f Cornerstone is saying I owe a certain amount (like $xxxxx.xx), I must have the details and be shown who paid (names only, not personal info), when it was paid, when the client dropped the policy (Mid-West, MEGA, AAS), and how Cornerstone came up with that amount.[/COLOR]
[COLOR=#0000ff]If this information can't be provided, then there's no basis nor proof for me to know what I need to pay, and no way to cross reference it with my accounting.[/COLOR]
[COLOR=#0000ff]I would also like a statement of checks that were cut to me (or direct deposited into my account) please.[/COLOR]
[COLOR=#0000ff]All of this information used to be accessible on the website, so I know it's available.[/COLOR]
[COLOR=#0000ff]If it can't be proven, then this isn't going to get anywhere.[/COLOR]
[COLOR=#0000ff]No matter what, this information is a must in order to complete any transaction if there is to be one.[/COLOR]
[COLOR=#0000ff]Also, HIPAA prohibits me from having clients personal information, however, this isn't a breach of HIPAA since I'm not asking for client's personal info, just what was stated above please that is pertaining my financial information.[/COLOR]
[COLOR=#0000ff]If I still have people on accounts, and it may still pay out, that's one of the things I want to review. [/COLOR]
[COLOR=#0000ff]Thanks,
Xxxxxxxx
I have no reason to lie about HIPAA. I will provide you every possible piece of information that I can, which will be the same information that we provide to everyone that asks.
I can now guarantee you that there will not be any type of reduced settlement on your account. You will have two options to repay your debt: 1) pay entire ending balance then receive monthly back-end checks on all future earnings or 2) pay in full, and immediately, the difference between your remaining first year policies (you are eligible for 95% of per the contract), and your ending balance. This number will change on or around February 5th, based on the fact that new numbers come out each month around the 5th business day of the month.
Thank you!!!!
Last edited by STIBROKER@AUSTIN.RR.COM : 01-25-2008 at 10:46 PM.
Well, I have to admit that I have yet to see anything from them other than a nasty letter saying I owe them money. No letters from any collection agencies either.
And I just talked to my old DSL earlier today and he said that they usualy just try and push people into paying and rarely ever pursue it beyond a phone call and a letter from them.
I bet if you call Vector One..you will find a different story....
Originally Posted by Colorado Newbie
Well, I have to admit that I have yet to see anything from them other than a nasty letter saying I owe them money. No letters from any collection agencies either.
And I just talked to my old DSL earlier today and he said that they usualy just try and push people into paying and rarely ever pursue it beyond a phone call and a letter from them.
Mega comes collecting
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